London housing crisis: new survey finds that most private landlords will not lower their rents in response to housing benefit cuts

Following George Osborne's announcement that he intends to cap and then cut levels of housing benefit Philippa Roe, cabinet member for housing at Westminster Council, wrote at Comment is Free:

Following the budget, some housing charities have voiced concerns that the cut in benefit will lead to an increase in homelessness. While we respect their views, it is important to point out that the current system has artificially raised rents. When the new, lower housing-benefit rate is in place, we believe that rents will automatically fall as landlords will not be able to charge such high sums.

Many people from across the political spectrum would agree that the current system has encouraged private sector landlords to milk the taxpayer. But a survey published today by London Councils, which represents all of the capital's councils, indicates that Roe's belief that "rents will automatically fall" is optimistic.

About 60 percent of 270 landlords who responded to the survey said they would not lower the rents they charge by any amount at all if changes in Local Housing Allowance left tenants unable to pay them. Nearly all the respondents said that if the planned changes resulted in tenants being more than £20 a week short of the required rent they would either evict them or not renew their tenancy agreements when these expired. Furthermore, more than a quarter of the landlords said they would reduce the number of properties available to people receiving benefit if the changes go ahead.

London Councils concludes that rather than resulting in landlords lowering their rents the government's cap and cuts, scheduled to be introduced in April and October next year respectively, will lead to increased homelessness and overcrowding and force many who can no longer afford their rents to seek cheaper accommodation, probably involving moving from Inner to Outer London boroughs.

The survey adds a dramatic new dimension to the developing picture of what the coalition's various planned reductions in housing benefit might mean for many thousands of Londoners and for the social character of London itself. Earlier this year London Councils calculated that the planned cap alone could result in over 18,500 households, the vast majority including children, having to move home, most of them from central London to the suburbs where rents are cheaper.

By applying the probability of landlords evicting tenants or terminating their contracts to the Department for Work and Pensions's assessment of the impact of the full range of its planned housing benefit changes in London (which I reported on yesterday), the organisation has calculated that more than 82,000 poorer households across London could be forced to leave their current accommodation

London Councils's executive member for housing Steve Bullock, who is also Mayor of Lewisham, said that, "This could equate to as many as 250,000 Londoners" many of whom are "in work but on low incomes."

The London Councils survey adds to the evidence that private landlords will be reluctant to adjust their rents downwards if and when the housing benefit changes come into force. The National Landlords Association recently claimed that "as many as 90 percent of private landlords" across the country could be "less likely" to take on benefit claimants if the levels of benefit drop.

Responding to the London Councils survey, the chief executive of Shelter Campbell Robb said:

This research exposes the government's baseless assumption that landlords affected by the cuts will lower their rents in order to keep people in their properties. We are extremely concerned that so many of London's landlords say they will evict tenants who fall into arrears, while some will stop renting to LHA claimants altogether. This will not only make it even more difficult for claimants to find a place to live, but will add to the already significant levels of homelessness and overcrowding in this city.

Boris Johnson has joined with London Councils in asking the government to permit "transitional arrangements in London pending a complete review of the Housing Benefit system." The response is awaited with interest.